Adjustable Rate Mortgages (ARMs) accounted for more than 7% of mortgage applications last week, significantly above the usual 3-5%. The dollar volume of ARMs constituted about 20% of all applications, with heightened interest particularly in jumbo ARMs. This shift is attributed to borrowers seeking lower rates compared to conventional mortgages. Industry experts noted a rise in 2-1 buydowns and a tendency to move away from Fannie Mae and Freddie Mac products to FHA and VA offerings, particularly due to lower mortgage insurance premiums and relaxed credit score requirements.
When looking at dollar volume, ARMs represented about 20% of all applications, highlighting a clear shift towards adjustable-rate mortgages as borrowers seek better financial terms.
The increase in 2-1 buydowns reflects a strategic response by borrowers and lenders to rising rates, providing an innovative way to afford homes despite costs.
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